German Inflation Accelerated in November to Fastest in 12 Years

German inflation accelerated in November to the fastest pace in 12 years, led by surging oil and food costs.

Consumer prices, measured using a harmonized European Union method, rose 3.3 percent from a year ago after increasing 2.7 percent in October, the Federal Statistics Office in Wiesbaden said today, confirming a preliminary estimate published Nov. 27. That's the fastest inflation measured since harmonized data for Germany started being collated in January 1996. In the month, prices rose 0.5 percent.

An 84 percent surge in oil prices since mid-January is driving up inflation in Europe's largest economy even as the euro's ascent to a record against the dollar makes imports cheaper. While the European Central Bank on Dec. 6 left its key rate at 4 percent, President Jean-Claude Trichet threatened to raise borrowing costs if workers win bigger pay increases to compensate for higher costs.

``German inflation rates are unlikely to fall to below 3 percent until March, obviously pushing up the euro-area rate,'' said Stefan Bielmeier, an economist at Deutsche Bank AG in Frankfurt. ``An additional concern for the ECB are German wage demands going into next year.''

European inflation last month accelerated to the fastest pace in more than six year, with prices rising 3 percent from a year earlier. The ECB aims to keep annual price gains just below 2 percent.